Bovine beta1,4galactosyltransferase (beta1,4GT) is a 402 residue long protein, which has a general topology similar to other glycosyltransferases that consists of a short amino-terminal cytoplasmic tail, a membrane signal anchor domain, a stem region and a carboxyl- terminal catalytic domain. The enzyme transfers galactose from UDP- galactose to N-acetylglucosamine (NAGlc), either free or bound to an oligosaccharide, to produce N-acetyllactosamine with a beta1-4 linkage. To analyze the catalytic domain we prepared cDNA constructs of the amino- terminal deleted forms of the protein in pGEX-2T vector and expressed them in E. coli as glutathione-S-transferase (GST) fusion proteins. Recombinant proteins were localized in inclusion bodies which were solubilized in 5 M guanidine-HCl. Renaturation and regeneration of the enzyme activity, from the solubilized protein was strictly dependent on the presence of an "oxido-shuffling" reagent, a mixture of 8:1 mM reduced:oxidized glutathione. Renatured/reoxidized fusion proteins, purified on glutathione-affinity columns, were active in beta1,4GT and lactose synthetase (LS) assays. After thrombin cleavage of the fusion protein and subsequent removal of GST domain, the recombinant beta1,4GT has 50-85% of the specific activity of bovine milk GT. The apparent K-m's for NAGlc and UDP-galactose were similar to that of bovine milk beta1,4GT. Deletion analysis show that both beta1,4GT and LS activities remain intact even in the absence of the first 129 residues, but the activities are lost when deletions extend up to residue 142. Site directed mutagenesis of Cys 134 to either Ala or Ser resulted in the loss of both beta1,4GT and LS enzyme activities. In contrast to the previously reported result (Aoki D, Appert HE, Johnson D, Wang 55, Fukuda MN (1990) EMBO J. 9, 3171-3178), our results show that beta1,4GT produced in E.coli is present in inclusion bodies as an inactive protein. "Oxido-shuffling" reagents are required for the formation of a disulfide bond involving Cys 134, which is crucial for proper folding of the protein and for the regeneration of the enzyme activity.